Reasons for or against Health Care Reform

[erosewater]

Originally Posted by KingWithoutACrown

I just don't get how this will reduce the deficit.

It doesn't. See my posts up the page about the SS and LTC accounting gimmicks. And those are both small potatoes compared to the shady Medicare accounting (Not only are the unspecified Medicare cuts planned for some undetermined date very unlikely to happen, even if they do happen you can't reduce spending in an unfunded entitlement program and call it both deficit reduction and Medicare savings.). They also assume no changes in current GDP projections despite a bunch of measures in the bill that will contribute to slower economic growth. Anyone who says this bill cuts the deficit is lying, stupid, or both.

[Omikron]

For: my premiums will be reduced by $2,500 a year.

[Herbert Hoover]

Originally Posted by KingWithoutACrown

I just don't get how this will reduce the deficit.

It bends the health cost curve down, especially in Medicare. (This is partly why we hear about death squads and partly why folks don't believe it will ever really happen)

[erosewater]

Originally Posted by KingWithoutACrown

I just don't get how this will reduce the deficit. That just defies common sense to me or am I dumb? Are there any good pieces written by independent and objective economist think tanks that spell out some predictions in the bill? If there are problems with Social Security, how can we trust the gov't to execute this?

I don't know if Greg Mankiw passes your independent and objective test or not, but:

There has been a lot of talk lately about the CBO scoring of the health bill. Here is one thing people should understand about their numbers: When they estimate the budget impact of a bill like this, they assume the path of GDP is unchanged.

Recall that the bill raises taxes substantially. Some of these tax hikes are the explicit tax increases on capital income to pay for the insurance subsidies. Some of these tax hikes are the implicit marginal rate increases from the phase-out of the insurance subsidies as a person's income rises. Both of these would be expected to reduce GDP growth.

Indeed, to be very wonkish about it, these tax changes could have especially large GDP effects. Some people like to argue that taxes have small GDP effects because income and substitution effects offset each other. But if you give someone a subsidy and then phase it out, both the income and substitution effects work in the direction of reducing work effort.

Why does CBO assume no change in GDP? It is not because the CBO staffers necessarily believe that result. Rather, it is just one of the conventions of budget scoring.

http://gregmankiw.blogspot.com/2010/...o-scoring.html

[JustASix]

What does that mean?

[cubedbee]

Originally Posted by Herbert Hoover

It bends the health cost curve down, especially in Medicare. (This is partly why we hear about death squads)

Please reference the section number of the bill that supposedly accomplishes this.

[erosewater]

Originally Posted by Herbert Hoover

It bends the health cost curve down, especially in Medicare. (This is partly why we hear about death squads and partly why folks don't believe it will ever really happen)

So you agree that this bill does not do anything to improve the sustainability of Medicare? Because if you're claiming cuts in Medicare offset the spending in this bill, then you can't also claim to be shoring up Medicare. It's one or the other.

[Herbert Hoover]

Originally Posted by erosewater

...Greg Mankiw passes your independent and objective test or not...

He's definitely a righty, but I enjoy reading his arguments as he's a good economist. Same with Barro.

[Herbert Hoover]

Originally Posted by erosewater

So you agree that this bill does not do anything to improve the sustainability of Medicare? Because if you're claiming cuts in Medicare reduce the deficit, then you can't also claim to be shoring up Medicare. It's one or the other.

I think we all would be shocked to see significant cuts in Medicare.

[erosewater]

Originally Posted by Herbert Hoover

I think we all would be shocked to see significant cuts in Medicare.

You haven't answered the question, and your post seems to contradict your previous one claiming that this bill would bend the cost curve of Medicare.